Monday Midday Livestock Market Summary - Outside Pressures Send Complex Lower

GENERAL COMMENTS:

At the day's opening bell, the cattle complex seemed as though it was going to trade strong; but as time passed, outside market concerns pushed contracts lower. The lean hog complex is in the same boat as its market is $1.00 to $2.00 lower and desperately needs to see strong domestic consumer support. December lean hogs are down $2.88 at $79.925, December corn is down 7 cents per bushel and December soybean meal is down $1.90. The Dow Jones Industrial Average is down 270.76 points.

LIVE CATTLE:

Live cattle futures are plunging lower as the market's strong show in the cash cattle sector isn't enough support to outweigh the pressures of the economy's uncertainty. October live cattle are down $0.75 at $143.50, December live cattle are down $1.25 at $147.30, and February live cattle are down $1.07 at $151.62. With boxed beef prices waning and packers now having to chase the cash market a little more aggressively -- monitoring slaughter speed is incredibly important. If boxes continue to work their way lower, packers may cut production in the form of slowing processing to preserve margin.

Last week, Southern live cattle traded for $143, which is $1.00 stronger than last week's weighted average, and Northern dressed cattle traded for mostly $228, which is also $1.00 stronger than last week's weighted average.

Boxed beef prices have not been updated by the USDA at this time.

FEEDER CATTLE:

Feeder cattle futures started the day off higher, but as the morning progressed lower tones sent the market tumbling lower. Friday's Cattle on Feed Report came out neutral as placements and on-feed totals were steady with a year ago, but marketings were 6% higher. Nevertheless, the market seems to be trading lower not because of Friday's report necessarily, but because of overbearing outside pressures (higher interest rates, higher inflation and overall economic uncertainty). October feeders are down $0.82 at $177.52, November feeders are down $0.57 at $177.67 and January feeders are down $0.92 at $178.55. Thankfully the corn complex isn't adding to the list of market pressures as it's trading 5 to 6 cents lower.

LEAN HOGS:

The lean hog complex is taking a wild ride in Monday's market and unfortunately the spot December contract is carving out a new low for the move, which is pressuring prices not last seen since February 2022. October lean hogs are down $1.97 at $90.65, December lean hogs are down $2.75 at $80.05, and February lean hogs are down $2.77 at $84.27. It's likely the market is concerned with China's third release of pork reserved last week and is skeptical of what this week's export report will unveil. Continuing to monitor pork cutout values will be one of the most important signals for the lean hog market as packers are going to need to see consumer support here domestically.

The projected CME Lean Hog Index for 9/23/2022 is down $0.60 at $96.99, and the actual index for 9/22/2022 is down $0.42 at $97.59. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.24 with a weighted average of $90.45, ranging from $82.00 to $100.00 on 5,271 head and a five-day rolling average of $93.03. Pork cutouts total 198.67 loads with 166.28 loads of pork cuts and 32.38 loads of trim. Pork cutout values: up $0.64, $101.57.